Alert April 14, 2009

FASB Formally Adopts Staff Positions on Fair Value

The Financial Accounting Standards Board (“FASB”) has issued final Staff positions: FSP FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly,” and FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments.”  The proposed versions of those Staff positions and the FASB statements relating to their adoption were discussed in the March 24, 2009 Alert and April 7, 2009 Alert, respectively.

In addition, FASB issued another Staff position, FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments,” which requires publicly traded companies (which would include some banks, bank holding companies, investment advisers and investment companies) to provide certain fair value disclosures in their interim reports, not just their annual reports.  This Staff position is effective for interim periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009.